Reference no: EM132765193

On January 1, 2019, Jose, Mari and Chan decided to form a partnership. Jose, a sole proprietor, will transfer to the partnership his net assets, excluding cash. Mari will contribute cash in an amount equal to one and a half times the investment of Jose. Chan will contribute a piece of Land with an agreed value of P1,800,000 subject to a mortgage of P300,000 to be assumed by the partnership. As a sole proprietor, the following are the accounts in the ledger of Jose.

Cash-P360,000;

Accounts receivable-P840,000;

Allowance for Bad Debts-P90,000;

Inventory-P1,200,000;

Equipment-P1,050,000;

Accumulated Depreciation-P210,000;

Accounts payable-P450,000;

Jose, Capital-P2,700,000.

The Articles of Co-Partnership executed for the purpose calls for adjustments to the assets, as follows:

a) The allowance for Bad Debts should be increased by P150,000;

b) Inventories should be valued at P1,000,000 only;

c) Equipment is under depreciated by P240,000.

Problem 1: Assuming the each partner is credited for the full amount of net assets invested, how much is capital balance of Jose in the new partnership?